Chapter 7 Bankruptcy Attorneys in Jacksonville
Affordable Bankruptcy Debt Relief in Northeast Florida
A Chapter 7 bankruptcy is what most people think of when they hear the word bankruptcy. A Chapter 7, or straight bankruptcy, is basically a liquidation of your non-exempt assets. Your property is sold and the proceeds are used to pay creditors. All debts remaining after your assets are sold are then completely discharged, leaving you debt free.
Many people assume this means they will lose everything they own. These fears are often exaggerated, as liquidation applies only to what is called non-exempt property. You may be able to keep your house, your car, and other exempt personal property. We will explain what exemptions are available to you and how to properly claim them. It is also possible to negotiate a “buy back” of your non-exempt property from the Chapter 7 Trustee.
How your bankruptcy status is determined
Under the new bankruptcy laws that went into effect in October 2005, applicants for Chapter 7 bankruptcy are now subject to a two-part means test to determine if they qualify. First, after taking out certain necessary expenses like rent and food, it will be determined whether you can afford to pay 25 percent of your non-priority, unsecured debt—credit cards, for example.
Then your income is compared with the state’s median income. If your income is more than the state’s median income and you can afford to pay more than 25 percent of your unsecured debt, you will not be allowed to file for Chapter 7. If your income is lower than the state median, but you can still afford to pay 25 percent of your unsecured debt, the court decides whether you can file for Chapter 7 or Chapter 13.
Courts are now required to apply living standards set forth by the Internal Revenue Service to decide what is a reasonable amount to pay for rent, food, and other living expenses to determine how much you can afford to pay on your debts.
Credit counseling is required
Another provision of the new law is the requirement that you to meet with a credit counselor sometime during the six-months prior to applying for bankruptcy. Also, you are required to attend money management classes before final discharge of your debts is allowed. Both of these sessions can be done online or by telephone.
Contact our Chapter 7 bankruptcy lawyers in Jacksonville
Lansing Roy, P.A., represents clients filing for Chapter 7 bankruptcy who live in the Middle District of Florida, Jacksonville Division. Our bankruptcy lawyers have the skill and experience to assess your individual financial situation, examine all of your options and help you take control of your financial life. Please call us at 904.391.0030 or contact us online to schedule a free initial consultation.
For additional information on Chapter 7 bankruptcy and answers to frequently asked questions, click here.